Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 310 Fourth Substitute (2018GS)

Sponsor

Rep. Schultz, M.

Final action

Governor Signed 3/19/2018

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• modifies provisions related to the Residence Lien Restriction and Lien Recovery Fund Act, the Building Inspector and Factory Built Housing Licensing Act, and other related provisions;
• discontinues assessments to provide money for the continuing operation of the Residence Lien Recovery Fund;
• requires certain reporting requirements from the Division of Occupational and Professional Licensing to the Legislature regarding the Residence Lien Recovery Fund, including providing the Legislature with a recommendation of when provisions related to the fund should be repealed due to insufficient money in the fund to pay claims; and
• makes technical changes.

Every vote on this bill

Bill text

PROFESSIONAL LICENSING AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Mike Schultz
Senate Sponsor: 
David G. Buxton
LONG TITLE
General Description:
This bill modifies provisions of the Residence Lien Restriction and Lien Recovery
Fund Act, the Building Inspector and Factory Built Housing Licensing Act, and other
related provisions.
Highlighted Provisions:
This bill:
▸ modifies provisions related to the Residence Lien Restriction and Lien Recovery
Fund Act, the Building Inspector and Factory Built Housing Licensing Act, and
other related provisions;
▸ discontinues assessments to provide money for the continuing operation of the
Residence Lien Recovery Fund;
▸ requires certain reporting requirements from the Division of Occupational and
Professional Licensing to the Legislature regarding the Residence Lien Recovery
Fund, including providing the Legislature with a recommendation of when
provisions related to the fund should be repealed due to insufficient money in the
fund to pay claims; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
38-11-102
, as last amended by Laws of Utah 2014, Chapter 108
38-11-104
, as last amended by Laws of Utah 2004, Chapter 42
38-11-105
, as last amended by Laws of Utah 2008, Chapter 382
38-11-106
, as last amended by Laws of Utah 2004, Chapter 42
38-11-201
, as last amended by Laws of Utah 2013, Chapter 400
38-11-202
, as last amended by Laws of Utah 2009, Chapter 183
38-11-203
, as last amended by Laws of Utah 2016, Chapter 238
38-11-301
, as last amended by Laws of Utah 2009, Chapter 183
58-56-9
, as last amended by Laws of Utah 2011, Chapter 14
58-56-9.3
, as last amended by Laws of Utah 2010, Chapter 310
58-56-9.5
, as last amended by Laws of Utah 2010, Chapter 278
63J-1-504
, as last amended by Laws of Utah 2013, Chapter 310
ENACTS:
58-56-9.4
, Utah Code Annotated 1953
REPEALS AND REENACTS:
38-11-206
, as last amended by Laws of Utah 2011, Chapter 367
REPEALS:
38-11-302
, as last amended by Laws of Utah 2009, Chapter 183
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
38-11-102
 is amended to read:
38-11-102.
Definitions.
(1) "Board" means the Residence Lien Recovery Fund Advisory Board established
under Section 
38-11-104
.
(2) "Certificate of compliance" means an order issued by the director to the owner
finding that the owner is in compliance with the requirements of Subsections 
38-11-204
(4)(a)
and (4)(b) and is entitled to protection under Section 
38-11-107
.
(3) "Construction on an owner-occupied residence" means designing, engineering,
constructing, altering, remodeling, improving, repairing, or maintaining a new or existing
residence.
(4) "Department" means the Department of Commerce.
(5) "Director" means the director of the Division of Occupational and Professional
Licensing.
(6) "Division" means the Division of Occupational and Professional Licensing.
(7) "Duplex" means a single building having two separate living units.
(8) "Encumbered fund balance" means the aggregate amount of outstanding claims
against the fund. The remainder of the money in the fund is unencumbered funds.
(9) "Executive director" means the executive director of the Department of Commerce.
(10) "Factory built housing" is as defined in Section 
15A-1-302
.
(11) "Factory built housing retailer" means a person that sells factory built housing to
consumers.
(12) "Fund" means the Residence Lien Recovery Fund established under Section
38-11-201
.
(13) "Laborer" means a person who provides services at the site of the construction on
an owner-occupied residence as an employee of an original contractor or other qualified
beneficiary performing qualified services on the residence.
(14) "Licensee" means any holder of a license issued under Title 58, Chapter 3a,
Architects Licensing Act; Chapter 22, Professional Engineers and Professional Land Surveyors
Licensing Act; Chapter 53, Landscape Architects Licensing Act; and Chapter 55, Utah
Construction Trades Licensing Act.
(15) "Nonpaying party" means the original contractor, subcontractor, or real estate
developer who has failed to pay the qualified beneficiary making a claim against the fund.
(16) "Original contractor" means a person who contracts with the owner of real
property or the owner's agent to provide services, labor, or material for the construction of an
owner-occupied residence.
(17) "Owner" means a person who:
(a) contracts with a person who is licensed as a contractor or is exempt from licensure
under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for the construction on an
owner-occupied residence upon real property that the person:
(i) owns; or
(ii) purchases after the person enters into a contract described in this Subsection (17)(a)
and before completion of the owner-occupied residence;
(b) contracts with a real estate developer to buy a residence upon completion of the
construction on the owner-occupied residence; or
(c) purchases a residence from a real estate developer after completion of the
construction on the owner-occupied residence.
(18) "Owner-occupied residence" means a residence that is, or after completion of the
construction on the residence will be, occupied by the owner or the owner's tenant or lessee as a
primary or secondary residence within 180 days after the day on which the construction on the
residence is complete.
(19) "Qualified beneficiary" means a person who:
(a) provides qualified services;
(b) pays necessary fees [
or assessments
] required under this chapter; and
(c) registers with the division:
(i) as a licensed contractor under Subsection 
38-11-301
(1) or (2), if that person seeks
recovery from the fund as a licensed contractor; or
(ii) as a person providing qualified services other than as a licensed contractor under
Subsection 
38-11-301
(3) if the person seeks recovery from the fund in a capacity other than as
a licensed contractor.
(20) (a) "Qualified services" means the following performed in construction on an
owner-occupied residence:
(i) contractor services provided by a contractor licensed or exempt from licensure
under Title 58, Chapter 55, Utah Construction Trades Licensing Act;
(ii) architectural services provided by an architect licensed under Title 58, Chapter 3a,
Architects Licensing Act;
(iii) engineering and land surveying services provided by a professional engineer or
land surveyor licensed or exempt from licensure under Title 58, Chapter 22, Professional
Engineers and Professional Land Surveyors Licensing Act;
(iv) landscape architectural services by a landscape architect licensed or exempt from
licensure under Title 58, Chapter 53, Landscape Architects Licensing Act;
(v) design and specification services of mechanical or other systems;
(vi) other services related to the design, drawing, surveying, specification, cost
estimation, or other like professional services;
(vii) providing materials, supplies, components, or similar products;
(viii) renting equipment or materials;
(ix) labor at the site of the construction on the owner-occupied residence; and
(x) site preparation, set up, and installation of factory built housing.
(b) "Qualified services" does not include the construction of factory built housing in
the factory.
(21) "Real estate developer" means a person having an ownership interest in real
property who:
(a) contracts with a person who is licensed as a contractor or is exempt from licensure
under Title 58, Chapter 55, Utah Construction Trades Licensing Act, for the construction of a
residence that is offered for sale to the public; or
(b) is a licensed contractor under Title 58, Chapter 55, Utah Construction Trades
Licensing Act, who engages in the construction of a residence that is offered for sale to the
public.
(22) (a) "Residence" means an improvement to real property used or occupied, to be
used or occupied as, or in conjunction with:
(i) a primary or secondary detached single-family dwelling; or
(ii) a multifamily dwelling up to and including duplexes.
(b) "Residence" includes factory built housing.
(23) "Subsequent owner" means a person who purchases a residence from an owner
within 180 days after the day on which the construction on the residence is completed.
Section 2. Section 
38-11-104
 is amended to read:
38-11-104.
Board.
(1) There is created the Residence Lien Recovery Fund Advisory Board consisting of:
(a) three individuals licensed as a contractor who are actively engaged in construction
on owner-occupied residences;
(b) three individuals who are employed in responsible management positions with
major suppliers of materials or equipment used in the construction on owner-occupied
residences; and
(c) one member from the general public who has no interest in the construction on
owner-occupied residences, or supply of materials used in the construction on owner-occupied
residences.
(2) The board shall be appointed and members shall serve their respective terms in
accordance with Section 
58-1-201
.
(3) The duties and responsibilities of the board shall be to:
(a) advise the division with respect to informal adjudication of any claim for payment
from the fund and any request for a certificate of compliance received by the division;
(b) act as the presiding officer, as defined by rule, in formal adjudicative proceedings
held before the division with respect to any claim made for payment from the fund;
(c) advise the division with respect to:
(i) the general operation of the fund;
[
(ii) the amount and frequency of any assessment under this chapter;
]
[
(iii)
] 
(ii)
 the amount of any fees required under this chapter; 
and
[
(iv) the availability and advisability of using funds for purchase of surety bonds to
guarantee payment to qualified beneficiaries; and
]
[
(v)
] 
(iii)
 the limitation on the fund balance under Section 
38-11-206
; and
(d) review the administrative expenditures made by the division pursuant to Subsection
38-11-201
(4) and report its findings regarding those expenditures to the executive director on
or before the first Monday of December of each year.
(4) The attorney general shall render legal assistance as requested by the board.
Section 3. Section 
38-11-105
 is amended to read:
38-11-105.
Procedures established by rule.
In compliance with Title 63G, Chapter 4, Administrative Procedures Act, the division
shall establish procedures by rule by which claims for compensation from the fund and requests
for certificates of compliance shall be adjudicated [
and by which assessments shall be
collected
].
Section 4. Section 
38-11-106
 is amended to read:
38-11-106.
State not liable.
The state and the state's agencies, instrumentalities, and political subdivisions are not
liable for:
(1) issuance or denial of any certificate of compliance;
(2) any claims made against the fund; or
(3) failure of the fund to pay any amounts ordered by the director to be paid from the
fund
, including failure of the fund to pay any amounts ordered by the director to be paid
because there is insufficient money in the fund
.
Section 5. Section 
38-11-201
 is amended to read:
38-11-201.
Residence Lien Recovery Fund.
(1) There is created an expendable special revenue fund called the "Residence Lien
Recovery Fund."
[
(2) (a) The fund consists of all amounts collected by the division in accordance with
Section 
38-11-202
.
]
[
(b) (i) The division shall deposit the funds in an account with the state treasurer.
]
[
(ii) The division shall record the funds in the Residence Lien Recovery Fund.
]
[
(c)
] 
(2)
 The fund shall earn interest.
(3) The division shall employ personnel and resources necessary to administer the fund
and shall use fund money in accordance with Sections 
38-11-203
 and 
38-11-204
 and to pay the
costs charged to the fund by the attorney general.
(4) Costs incurred by the division
, on or after May 8, 2018,
 for administering the fund
[
shall
] 
may
 be paid out of fund money 
in an amount that may be no more than a total of
$300,000 for the remaining existence of the fund
.
(5) 
(a)
 The Division of Finance shall report annually to the Legislature, the division,
and the board.
(b)
 The report shall state:
[
(a)
] 
(i)
 amounts received by the fund;
[
(b)
] 
(ii)
 disbursements from the fund;
[
(c)
] 
(iii)
 interest earned and credited to the fund; and
[
(d)
] 
(iv)
 the fund balance.
[
(6) (a) For purposes of establishing and assessing fees under Section 
63J-1-504
, the
provisions of this chapter are considered a new program for fiscal year 1995-96.
]
[
(b) The department shall submit its fee schedule to the Legislature for its approval at
the 1996 Annual General Session.
]
Section 6. Section 
38-11-202
 is amended to read:
38-11-202.
Payments to the fund.
[
The
] 
Beginning on May 8, 2018, the
 Residence Lien Recovery Fund [
shall be
supported solely from
] 
will no longer be supported by special assessments and will be solely
supported by
:
[
(1) initial and special assessments collected by the division from licensed contractors
registered as qualified beneficiaries in accordance with Subsections 
38-11-301
(1) and (2) and
Section 
38-11-206
;
]
[
(2) initial and special assessments collected by the division from other qualified
beneficiaries registering with the division in accordance with Subsection 
38-11-301
(3) and
Section 
38-11-206
;
]
[
(3)
] 
(1)
 fees determined by the division under Section 
63J-1-504
 collected from
laborers under Subsection 
38-11-204
(7) when the laborers obtain a recovery from the fund;
[
(4)
] 
(2)
 amounts collected by subrogation under Section 
38-11-205
 on behalf of the
fund following a payment from the fund;
[
(5)
] 
(3)
 application fees determined by the division under Section 
63J-1-504
 collected
from:
(a) qualified beneficiaries or laborers under Subsection 
38-11-204
(1)(b) when qualified
beneficiaries or laborers make a claim against the fund; or
(b) owners or agents of the owners seeking to obtain a certificate of compliance for the
owner;
[
(6)
] 
(4)
 registration fees determined by the division under Section 
63J-1-504
 collected
from other qualified beneficiaries registering with the department in accordance with
Subsection 
38-11-301
(3)(a)(iii);
[
(7)
] 
(5)
 reinstatement fees determined by the division under Section 
63J-1-504
collected from registrants in accordance with Subsection 
38-11-302
(5)(b);
[
(8)
] 
(6)
 civil fines authorized under Subsection 
38-11-205
(2) collected by the attorney
general for failure to reimburse the fund; and
[
(9)
] 
(7)
 any interest earned by the fund.
Section 7. Section 
38-11-203
 is amended to read:
38-11-203.
Disbursements from the fund -- Limitations.
(1) A payment of any claim upon the fund by a qualified beneficiary shall be made only
upon an order issued by the director finding that:
(a) the claimant was a qualified beneficiary during the construction on a residence;
(b) the claimant complied with the requirements of Section 
38-11-204
;
(c) there is adequate money in the fund to pay the amount ordered; and
(d) the claimant provided the qualified services that are the basis of the claim. 
(2) A payment of a claim upon the fund by a laborer shall be made only upon an order
issued by the director finding that:
(a) the laborer complied with the requirements of Subsection 
38-11-204
(7); and
(b) there is adequate money in the fund to pay the amount ordered.
(3) (a) An order under this section may be issued only after the division has complied
with the procedures established by rule under Section 
38-11-105
.
(b) The director shall order payment of the qualified services as established by
evidence, or if the claimant has obtained a judgment, then in the amount awarded for qualified
services in the judgment to the extent the qualified services are attributable to the
owner-occupied residence at issue in the claim.
(c) The director shall order payment of interest on amounts claimed for qualified
services based on the current prime interest rate at the time payment was due to the date the
claim is approved for payment except for delays attributable to the claimant but not more than
10% per annum.
(d) The rate shall be the prime lending rate as published in the Wall Street Journal on
the first business day of each calendar year adjusted annually.
(e) The director shall order payment of costs in the amount stated in the judgment. If
the judgment does not state a sum certain for costs, or if no judgment has been obtained, the
director shall order payment of reasonable costs as supported by evidence. The claim
application fee as established by the division pursuant to Subsection 
38-11-204
(1)(b) is not a
reimbursable cost.
(f) If a judgment has been obtained with attorneys' fees, notwithstanding the amount
stated in a judgment, or if no judgment has been obtained but the contract provides for
attorneys' fees, the director shall order payment of attorneys' fees not to exceed 15% of
qualified services. If the judgment does not state a sum for attorneys' fees, no attorneys' fees
will be paid by the director.
(4) (a) Payments made from the fund may not exceed $75,000 per construction project
to qualified beneficiaries and laborers who have claim against the fund for that construction
project.
(b) If claims against the fund for a construction project exceed $75,000, the $75,000
shall be awarded proportionately so that each qualified beneficiary and laborer awarded
compensation from the fund for qualified services shall receive an identical percentage of the
qualified beneficiary's or laborer's award.
[
(5) Subject to the limitations of Subsection (4), if on the day the order is issued there
are inadequate funds to pay the entire claim and the director determines that the claimant has
otherwise met the requirements of Subsection (1) or (2), the director shall order additional
payments once the fund meets the balance limitations of Section 
38-11-206
.
]
[
(6)
] 
(5)
 (a) A payment of any claim upon the fund may not be made to an assignee or
transferee unless an order issued by the director finds that:
(i) the claim is assigned or transferred to a person who is a qualified beneficiary; and
(ii) the person assigning or transferring the claim:
(A) was a qualified beneficiary during the construction on a residence; and
(B) provided the qualified services that are the basis of the claim.
(b) A claimant who is an assignee or transferee of a claim upon the fund under this
Subsection (6) does not have to meet the requirements of Subsections 
38-11-203
(1)(a) and (d). 
Section 8. Section 
38-11-206
 is repealed and reenacted to read:
 38-11-206.
Limitations on fund balance.
By October 1 of each year, the division shall provide a written report to the Legislature
and the Business and Labor Interim Committee that describes:
(1) the amount of money in the fund, including the encumbered fund balance;
(2) an estimate of when the fund will have insufficient money to continue to pay claims
under this chapter; and
(3) a recommendation to the Legislature of whether the substantive provisions of this
chapter should be repealed due to insufficient money in the fund.
Section 9. Section 
38-11-301
 is amended to read:
38-11-301.
Registration as a qualified beneficiary -- Initial regular assessment --
Affidavit.
(1) A person licensed as of July 1, 1995, as a contractor under the provisions of Title
58, Chapter 55, Utah Construction Trades Licensing Act, in license classifications that
regularly engage in providing qualified services shall be automatically registered as a qualified
beneficiary [
upon payment of the initial assessment
].
(2) A person applying for licensure as a contractor after July 1, 1995, in license
classifications that regularly engage in providing qualified services shall be automatically
registered as a qualified beneficiary upon issuance of a license [
and payment of the initial
assessment
].
(3) (a) After July 1, 1995, any person providing qualified services as other than a
contractor as provided in Subsection (1) or any person exempt from licensure under the
provisions of Title 58, Chapter 55, Utah Construction Trades Licensing Act, may register as a
qualified beneficiary by:
(i) submitting an application in a form prescribed by the division;
(ii) demonstrating registration with the Division of Corporations and Commercial Code
as required by state law; 
and
(iii) paying a registration fee determined by the division under Section 
63J-1-504
[
;
and
]
.
[
(iv) paying the initial assessment established under Subsection (4), and any special
assessment determined by the division under Subsection 
38-11-206
(1).
]
(b) A person who does not register under Subsection (1), (2), or (3)(a) shall be
prohibited from recovering under the fund as a qualified beneficiary for work performed as
qualified services while not registered with the fund.
[
(4) (a) An applicant shall pay an initial assessment determined by the division under 
Section 
63J-1-504
.
]
[
(b) The initial assessment to qualified registrants under Subsection (1) shall be made
not later than July 15, 1995, and shall be paid no later than November 1, 1995.
]
[
(c) The initial assessment to qualified registrants under Subsections (2) and (3) shall
be paid at the time of application for license or registration, however, beginning on May 1,
1996, only one initial assessment or special assessments thereafter shall be required for persons
having multiple licenses under this section.
]
[
(5) A person shall be considered to have been registered as a qualified beneficiary on
January 1, 1995, for purposes of meeting the requirements of Subsection 
38-11-204
(1)(c)(ii) if
the person:
]
[
(a) (i) is licensed on or before July 1, 1995, as a contractor under the provisions of
Title 58, Chapter 55, Utah Construction Trades Licensing Act, in license classifications that
regularly engage in providing qualified services; or
]
[
(ii) provides qualified services after July 1, 1995, as other than a contractor as
provided in Subsection (5)(a)(i) or is exempt from licensure under the provisions of Title 58,
Chapter 55, Utah Construction Trades Licensing Act; and
]
[
(b) registers as a qualified beneficiary under Subsection (1) or (3) on or before
November 1, 1995.
]
Section 10. Section 
58-56-9
 is amended to read:
58-56-9.
Qualifications of inspectors -- Contract for inspection services.
(1) An inspector employed by a local regulator, state regulator, or compliance agency
to enforce the codes shall:
(a) (i) meet minimum qualifications as established by the division in collaboration with
the commission;
(ii) be certified by a nationally recognized organization which promulgates
construction codes; or
(iii) pass an examination developed by the division in collaboration with the
commission;
(b) be currently licensed by the division as meeting those minimum qualifications; and
(c) be subject to revocation or suspension of the inspector's license or being placed on
probation if found guilty of unlawful or unprofessional conduct.
(2) A local regulator, state regulator, or compliance agency may contract for the
services of a licensed inspector not regularly employed by the regulator or agency.
(3) In accordance with Section 
58-1-401
, the division may:
(a) refuse to issue a license to an applicant;
(b) refuse to renew the license of a licensee;
(c) revoke, suspend, restrict, or place on probation the license of a licensee;
(d) issue a public or private reprimand;
(e) issue a citation to a licensee; and
(f) issue a cease and desist order.
Section 11. Section 
58-56-9.3
 is amended to read:
58-56-9.3.
Unprofessional conduct.
Unprofessional conduct is as defined in Subsection 
58-1-501
(2) and includes:
(1) knowingly failing to inspect or issue correction notices for code violations which
when left uncorrected would constitute a hazard to the public health and safety and knowingly
failing to require that correction notices are complied with as a building inspector;
(2) the use of alcohol or the illegal use of drugs while performing duties as a building
inspector or at any time to the extent that the inspector is physically or mentally impaired and
unable to effectively perform the duties of an inspector;
(3) gross negligence in the performance of official duties as a building inspector;
(4) the personal use of information or knowingly revealing information to unauthorized
persons when that information has been obtained by a building inspector as a result of the
inspector's employment, work, or position as an inspector;
(5) unlawful acts or practices which are clearly unethical under generally recognized
standards of conduct of a building inspector;
(6) engaging in fraud or knowingly misrepresenting a fact relating to the performance
of duties and responsibilities as a building inspector;
(7) a building inspector knowingly failing to require that all plans, specifications,
drawings, documents, and reports be stamped by architects, professional engineers, or both as
established by law;
(8) a building inspector knowingly failing to report to the division an act or omission of
a licensee under Title 58, Chapter 55, Utah Construction Trades Licensing Act, which when
left uncorrected constitutes a hazard to public health and safety;
(9) a building inspector knowingly failing to report to the division unlicensed practice
persons who are required to be licensed under Title 58, Chapter 55, Utah Construction Trades
Licensing Act;
(10) a building inspector's approval of work which materially varies from approved
documents that have been stamped by an architect, professional engineer, or both unless
authorized by the licensed architect, professional engineer, or both;
(11) a building inspector failing to produce verification of current licensure and current
certifications for the codes upon request of the division, a compliance agency, or a contractor
or property owner whose work is being inspected;
(12) a building inspector requiring work that materially varies from the building codes
adopted by the state;
[
(12)
] 
(13)
 nondelivery of goods or services by a registered dealer which constitutes a
breach of contract by the dealer;
[
(13)
] 
(14)
 the failure of a registered dealer to pay a subcontractor or supplier any
amounts to which that subcontractor or supplier is legally entitled; and
[
(14)
] 
(15)
 any other activity which is defined as unprofessional conduct by division
rule in accordance with the provisions of Title 63G, Chapter 3, Utah Administrative
Rulemaking Act.
Section 12. Section 
58-56-9.4
 is enacted to read:
 58-56-9.4.
Investigation of regulated activity.
(1) The division is responsible for the investigation of a person or an activity that
violates the provisions of this chapter.
(2) An investigation by the division may include:
(a) a requirement that potential administrative appeals described in Section 
15A-1-207
have been exhausted before conducting the investigation;
(b) an investigation of a person engaged in unlawful or unprofessional conduct; and
(c) a referral to the Uniform Building Code Commission to review a dispute involving
an application or interpretation of a building code or construction law by a licensee.
Section 13. Section 
58-56-9.5
 is amended to read:
58-56-9.5.
Penalty for unlawful conduct -- Citations.
(1) A person who violates a provision of Section 
58-56-9.1
 or who fails to comply with
a citation issued under this section after it is final is guilty of a class A misdemeanor.
(2) Grounds for immediate suspension of a licensee's license by the division under this
chapter include:
(a) the issuance of a citation for violation of a provision of Section 
58-56-9.1
or
58-56-9.3
; and
(b) failure by a licensee to make application to, report to, or notify the division with
respect to a matter for which application, notification, or reporting is required under this
chapter or rules made under this chapter by the division.
(3) (a) If upon inspection or investigation, the division concludes that a person has
violated a provision of Section 
58-56-9.1
or 
58-56-9.3
, or a rule or order issued with respect to
that section, and that disciplinary action is appropriate, the director or the director's designee
from within the division shall:
(i) promptly issue a citation to the person according to this chapter and any pertinent
rules;
(ii) attempt to negotiate a stipulated settlement; or
(iii) notify the person to appear before an adjudicative proceeding conducted under
Title 63G, Chapter 4, Administrative Procedures Act.
(b) (i) A person who violates a provision of Section 
58-56-9.1
or 
58-56-9.3
, as
evidenced by an uncontested citation, a stipulated settlement, or by a finding of violation in an
adjudicative proceeding, may be assessed a fine under this Subsection (3)(b) and may, in
addition to or instead of the fine, be ordered by the division to cease from violating the
provision.
(ii) Except as otherwise provided in Subsection (2)(a), the division may not assess
licensure sanctions referred to in Subsection 
58-56-9
(1)(c) through a citation.
(c) (i) Each citation shall be in writing and describe with particularity the nature of the
violation, including a reference to the provision of the chapter, rule, or order alleged to have
been violated.
(ii) The citation shall clearly state that the recipient must notify the division in writing
within 20 calendar days of service of the citation if the recipient wishes to contest the citation
at a hearing conducted under Title 63G, Chapter 4, Administrative Procedures Act.
(iii) The citation shall clearly explain the consequences of failure to timely contest the
citation or to make payment of any fines assessed by the citation within the time specified in
the citation.
(d) Each citation issued under this section, or a copy of each citation, may be served
upon any person upon whom a summons may be served:
(i) in accordance with the Utah Rules of Civil Procedure;
(ii) personally or upon the person's agent by a division investigator or by any person
specially designated by the director; or
(iii) by mail.
(e) (i) If within 20 calendar days from the service of a citation, the person to whom the
citation was issued fails to request a hearing to contest the citation, the citation becomes the
final order of the division and is not subject to further agency review.
(ii) The period to contest a citation may be extended by the division for cause.
(f) The division may refuse to issue or renew, suspend, revoke, or place on probation
the license of a licensee who fails to comply with a citation after it becomes final.
(g) The failure of an applicant for licensure to comply with a citation after it becomes
final is a ground for denial of a license.
(h) No citation may be issued under this section after the expiration of six months
following the occurrence of the violation.
(i) The director or the director's designee may assess fines for violations of Section
58-56-9.1
or 
58-56-9.3
 as follows:
(i) for a first offense determined under this Subsection (3), a fine of up to $1,000;
(ii) for a second offense, a fine of up to $2,000; and
(iii) for any subsequent offense, a fine of up to $2,000 for each day of continued
offense.
(j) For the purposes of issuing a final order under this section and assessing a fine
under Subsection (3)(i), an offense constitutes a second or subsequent offense if:
(i) the division previously issued a final order determining that a person committed a
first or second offense in violation of a provision of Section 
58-56-9.1
; or
(ii) (A) the division initiated an action for a first or second offense;
(B) no final order has been issued by the division in the action initiated under
Subsection (3)(j)(ii)(A);
(C) the division determines during an investigation that occurred after the initiation of
the action under Subsection (3)(j)(ii)(A) that the person committed a second or subsequent
violation of a provision of Section 
58-56-9.1
; and
(D) after determining that the person committed a second or subsequent offense under
Subsection (3)(j)(ii)(C), the division issues a final order on the action initiated under
Subsection (3)(j)(ii)(A).
(k) In issuing a final order for a second or subsequent offense under Subsection (3)(j),
the division shall comply with the requirements of this section.
(4) (a) Proceeds from a fine imposed under Subsection (3)(i) shall be deposited in the
Commerce Service Account created by Section 
13-1-2
.
(b) The director may collect an unpaid fine by:
(i) referring the matter to a collection agency; or
(ii) bringing an action in the district court of the county in which the person resides or
in the county where the director's office is located.
(c) (i) The state's attorney general or a county attorney shall provide legal assistance
and advice to the director in an action brought under Subsection (4)(b).
(ii) Reasonable attorney fees and costs shall be awarded in an action brought to enforce
the provisions of this section.
Section 14. Section 
63J-1-504
 is amended to read:
63J-1-504.
Fees -- Adoption, procedure, and approval -- Establishing and
assessing fees without legislative approval.
(1) As used in this section:
(a) (i) "Agency" means each department, commission, board, council, agency,
institution, officer, corporation, fund, division, office, committee, authority, laboratory, library,
unit, bureau, panel, or other administrative unit of the state.
(ii) "Agency" does not mean the Legislature or its committees.
(b) "Fee agency" means any agency that is authorized to establish fees.
(c) "Fee schedule" means the complete list of fees charged by a fee agency and the
amount of those fees.
(2) Each fee agency shall adopt a schedule of fees assessed for services provided by the
fee agency that are:
(a) reasonable, fair, and reflect the cost of services provided; and
(b) established according to a cost formula determined by the executive director of the
Governor's Office of Management and Budget and the director of the Division of Finance in
conjunction with the agency seeking to establish the fee.
(3) Except as provided in Subsection (6), a fee agency may not:
(a) set fees by rule; or
(b) create, change, or collect any fee unless the fee has been established according to
the procedures and requirements of this section.
(4) Each fee agency that is proposing a new fee or proposing to change a fee shall:
(a) present each proposed fee at a public hearing, subject to the requirements of Title
52, Chapter 4, Open and Public Meetings Act;
(b) increase, decrease, or affirm each proposed fee based on the results of the public
hearing;
(c) except as provided in Subsection (6), submit the fee schedule to the Legislature as
part of the agency's annual appropriations request; and
(d) where necessary, modify the fee schedule to implement the Legislature's actions.
(5) (a) Each fee agency shall submit its fee schedule or special assessment amount to
the Legislature for its approval on an annual basis.
(b) The Legislature may approve, increase or decrease and approve, or reject any fee
submitted to it by a fee agency.
(6) After conducting the public hearing required by this section, a fee agency may
establish and assess fees without first obtaining legislative approval if:
(a) (i) the Legislature creates a new program that is to be funded by fees to be set by the
Legislature;
(ii) the new program's effective date is before the Legislature's next annual general
session; and
(iii) the fee agency submits the fee schedule for the new program to the Legislature for
its approval at a special session, if allowed in the governor's call, or at the next annual general
session of the Legislature, whichever is sooner; 
or
[
(b) the Division of Occupational and Professional licensing makes a special
assessment against qualified beneficiaries under the Residence Lien Restriction and Lien
Recovery Fund Act as provided in Subsection 
38-11-206
(1); or
]
[
(c)
] 
(b)
 (i) the fee agency proposes to increase or decrease an existing fee for the
purpose of adding or removing a transactional fee that is charged or assessed by a
non-governmental third party but is included as part of the fee charged by the fee agency;
(ii) the amount of the increase or decrease in the fee is equal to the amount of the
transactional fee charged or assessed by the non-governmental third party; and
(iii) the increased or decreased fee is submitted to the Legislature for its approval at a
special session, if allowed in the governor's call, or at the next annual session of the
Legislature, whichever is sooner.
(7) (a) Each fee agency that wishes to change any fee shall submit to the governor as
part of the agency's annual appropriation request a list that identifies:
(i) the title or purpose of the fee;
(ii) the present amount of the fee;
(iii) the proposed new amount of the fee;
(iv) the percent that the fee will have increased if the Legislature approves the higher
fee;
(v) the estimated total annual revenue change that will result from the change in the
fee;
(vi) the account or fund into which the fee will be deposited; and
(vii) the reason for the change in the fee.
(b) (i) The governor may review and approve, modify and approve, or reject the fee
increases.
(ii) The governor shall transmit the list required by Subsection (7)(a), with any
modifications, to the Legislative Fiscal Analyst with the governor's budget recommendations.
(c) Bills approving any fee change shall be filed before the beginning of the
Legislature's annual general session, if possible.
(8) (a) Except as provided in Subsection (8)(b), the School and Institutional Trust
Lands Administration, established in Section 
53C-1-201
, is exempt from the requirements of
this section.
(b) The following fees of the School and Institutional Trust Lands Administration are
subject to the requirements of this section: application, assignment, amendment, affidavit for
lost documents, name change, reinstatement, grazing nonuse, extension of time, partial
conveyance, patent reissue, collateral assignment, electronic payment, and processing.
Section 15. 
Repealer.
This bill repeals:
Section 
38-11-302
,
Effective date and term of registration -- Penalty for failure to
pay assessments -- Reinstatement.